Weekly Market Pulse: Perception is Reality
It is said that there are two types of people in this world. Those who see the glass as half full and those who see it as half empty. On Wall Street, we call them bulls and bears. A bull can see an economic report and perceive it in a way that seems wholly illogical, misguided, and downright stupid to [...]
Weekly Market Pulse: Much Ado About Not Much
The SLR exemption is ending! The SLR exemption is ending! Doesn't exactly roll off the tongue, does it? There has been rampant speculation the last few weeks about the fate of the exemption the Fed provided banks a year ago with regard to the Supplemental Leverage Ratio that allowed them to ignore Treasuries and reserves. The banks themselves warned that [...]
Weekly Market Pulse: The More Things Change, The More The Song Remains The Same
Markets continue to move based on the expectation of a post-virus boom. At least that is the dominant narrative right now. The economy, boosted by another round of stimulus, will surge once the virus is under control and things return to normal. President Biden last week offered his version of optimism by saying that families would be able to gather [...]
Weekly Market Pulse: How High Can Rates Go?
I've been getting that question a lot these days. How high can rates go? It is asked in a way that seems to imply that the answer is obvious - not much. Why? The answer is almost always the same; the Fed can't and won't let rates go up. If they did, it would kill the economy and raise the [...]
Weekly Market Pulse – The Message Of The Market
I was told many years ago when I started in this business that it wasn't my job to predict the future. Our job as investors is to properly and accurately interpret the present. I was also told that wasn't as easy as it sounded and the current consensus about the state of the world was probably, almost certainly, almost always, [...]
Weekly Market Pulse – Real Rates Finally Make A Move
Last week was only four days due to the President's day holiday but it was eventful. The big news of the week was the spike in interest rates, which according to the press reports I read, "came out of nowhere". In other words, the writers couldn't find an obvious cause for a 14-basis point rise in the 10-year Treasury note [...]
Weekly Market Pulse – February 15, 2021
This is a holiday-shortened week in the US but there is some important data on tap. Retail sales are expected to show a month-to-month rise for the first time since September. Year-over-year numbers remain pretty subdued and likely will until life returns to something resembling normal. Producer prices will likely rise but inflation continues its benign ways. It is likely [...]
Conventional Wisdom Is Nothing of The Sort
If you had known in October all that would transpire over the next 2 ½ months, how would you have positioned your portfolio? The conventional wisdom before the election was that a Biden win would be negative for stocks because he has promised to raise taxes and specifically corporate taxes. In 2016, conventional wisdom was that a Trump victory would [...]
Tactical Update: Long-Term Trends
Note: There are a lot of charts in this post. That doesn't mean that we are technicians. We use charts because we are primarily interested in trends, especially long-term, big-picture trends. And charts are the easiest way to present that information. In general, you will want your tactical adjustments to respect the long-term trend. There are times when it makes [...]
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